Structural Change Within Versus Across Firms: Evidence from the United States

Xiang Ding, Teresa C. Fort, Stephen Redding and Peter K. Schott

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: We document the role of intangible capital in manufacturing firms' substantial contribution to non-manufacturing employment growth from 1977-2019. Exploiting data on firms' “auxiliary” establishments, we develop a novel measure of proprietary in-house knowledge and show that it is associated with increased growth and industry switching. We rationalize this reallocation in a model where irms combine physical and knowledge inputs as complements, and where producing the latter in-house confers a sector-neutral productivity advantage facilitating within-firm structural transformation. Consistent with the model, manufacturing firms with auxiliary employment pivot towards services in response to a plausibly exogenous decline in their physical input prices.

Keywords: structural transformation; professional services; intangible knowledge; economic growth (search for similar items in EconPapers)
JEL-codes: D24 L16 O47 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2022-06
New Economics Papers: this item is included in nep-cse, nep-knm, nep-sbm and nep-tid
References: Add references at CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
https://www2.census.gov/ces/wp/2022/CES-WP-22-19.pdf First version, 2022 (application/pdf)

Related works:
Working Paper: Structural change within versus across firms: evidence from the United States (2022)
Working Paper: Structural Change Within versus Across Firms: Evidence from the United States (2022)
Working Paper: Structural change within versus across firms: evidence from the United States (2022)
Working Paper: Structural Change Within versus Across Firms: Evidence from the United States (2022)
Working Paper: Structural Change Within Versus Across Firms: Evidence from the United States (2022)
Working Paper: Structural Change Within Versus Across Firms: Evidence from the United States (2022)
Working Paper: Structural Change Within Versus Across Firms: Evidence from the United States (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:22-19

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